The global virtual reality (VR) in gaming market size is expected to reach USD 45.09 billion by 2025, according to a new report by Grand View Research, Inc. Increasing competitiveness among key players such as Microsoft Corp., Sony Corp., and Nintendo Co. Ltd. to launch VR-compatible consoles has triggered industry growth.

Virtual reality technology can enable gamers to indulge in an imaginary setting where the gamer’s physical presence is simulated to be a part of the three-dimensional environment. With VR equipment and accessories, the user can view, move around, and even interact with the objects within the game. Several start-ups are developing prototypes for using the virtual reality technology in video games, which is expected to impact the growth favorably over the years to come.

Gaming consoles are expected to emerge as the most favored devices for playing games equipped with VR technology on account of the presence of efficient processors as compared to desktops and smartphones which may not match the immersive simulation experience provided by a console dedicated to playing games.

Lack of awareness about VR technology in games, high initial investment, compatibility issues of virtual reality devices with consoles, spatial discomfort and the risk of other physical and mental ailments may pose a challenge to the otherwise growing industry for VR technology in video games.

Further key findings from the report suggest:

Growing at a CAGR of around 30% during the forecast period, by 2025, the hardware segment is expected to account for a majority of the revenue a share

In 2015, the estimated size of the software segment was around USD 2 billion

Demand for virtual reality hardware is expected to increase drastically once the consumer versions are readily available

Smartphones are expected to be the fastest growing device segment during the forecast period

In 2015, the U.S. VR in gaming market accounted for the largest revenue share; however, China is expected to emerge as a key regional market by 2025

The Latin America and the MEA regions are projected to experience the fastest growth which may be attributed to rising awareness and demand for the technology in the coming years

As the technology is fairly new, a significant proportion of VR accessories and wearables are currently in the development stage; the Head Mounted Displays (HMDs) launched by Oculus VR, LLC, and HTC Corporation in 2015 and 2016 are popular among consumers